12 Replies

Good morning biggerpockets members, I am closing on my first rental property next week. This property is a duplex, that I will be house hacking. The property is currently occupied. I will be presenting a 30 day notice that weekend. I purchased my Leases and noticed from bigger pockets so I have those ready to go. Any advice you would give to someone purchasing their first investment property? Thank you in advance for your time!

@Juan Erick Rico Avalos Congrats! Most of the learning will come throughout the next year, but some advice is not to skimp on your due diligence when placing tenants. Create a list of criteria your "ideal tenant" would have and do not stray away from that list. Perform a background and credit check, and definitely verify their references. hope this helps!

@Grace Wang Thank you for the reply! I will keep this in mind when getting new tenants into my units! How do you suggest I should have my tenants pay rent? I would ideally like them to direct deposit or I have also heard of using Zillow to manage my rental? 

I 100% agree with Grace. I skimped (skipped) on this on my first tenant and I regretted it for 3 years. I learned some lessons and now I put extra effort into selecting good tenants.

Also, start looking for your second property!

Congrats @Juan Erick Rico Avalos on the investment. Question: does the other tenant have a lease in place? Or is that tenant month to month? If there is a lease in place you most likely will have to honor that contract. 

@Ben Scott One tenant is month to month. The other tenant’s lease expires January 30. I am giving the 30 day notice this month to the tenant still under lease just letting them know their lease will not renew. I plan on having the month to month tenant stay until I have the other unit updated. After that I will rent out the updated unit at market rent and move into the other unit. Both units have had long term tenants 15 and 20 years so they need updating. 

@Juan Erick Rico Avalos 15-20 year tenants that you are evicting? Is your plan to renovate and raise rental prices? Or are you just looking to start fresh with new tenants and upgraded units? I'm not in your situation nor have I been but my 2 cents. If I bought a property for a rental that had long term tenants. I'd keep the tenants. A tenant that has that long of a history in the same place would just make your life that much easier. But I'm a busy person. I'd rather not make the extra $1000-2000 a year knowing that it wasn't going to cost me more in the long run. I bill for $100 an hour with my current business. If I had to pull off a job for a day or 2 to deal with a tenant over something simple then it would cost me money to have not kept the old faithful tenants in place.

My comment may be completely ludacris(and I apologize if it is) but it may be something to really think about. Peace of mind in some situations is priceless.

@Shane Ryan thanks for your insight. The reason one tenant has to go is because my financing is owner occupied financing. I am having the other tenant move out as well after the winter (I live in Nebraska) because the tenant mentions they can’t afford more on rent. Their current rent is 575 while marker rents are 900-1100. I understand that it would be unfair to charge them that since they’re unit isn’t renovated, but I can’t afford to have them live in this unit for that rent price. The renovation wouldn’t be drastic either, it would mainly be flooring, paint, new bathroom sink/cabinetry and bathroom reglazing.